Rereading: Howard Brenton on The Ragged Trousered Philanthropists by Robert Tressell

On the centenary of the death of Robert Tressell, Howard Brenton celebrates the author's most famous work, The Ragged Trousered Philanthropists – a working-class Vanity Fair – which he adapted into a play

Around the year 1905, in a seaside town on the south coast of England, a group of painters and decorators are about to have dinner – what we Guardian readers call lunch. The men are renovating a big, ramshackle Victorian house called The Cave. They have been hired by the firm of Rushton & Co, whose business card reads: "Builders, Decorators and General Contractors. Funerals furnished. Estimates given for General Repairs to House Property. First-class Work only at Moderate Prices." Dinner is made by the youngest, Bert White. He has boiled the tea since half past 11 and cooked bloaters. One of the men, the recently religious Jack Slyme, accuses Bert of cheating the group by using yesterday's tea leaves. Fred Harlow, who sees himself as a Liberal, tells him to leave the boy alone. "You're no Liberal," quips Bundy, a big burly man and the group's racing tipster. "You just drink at the Liberal Club." They laugh and settle down to eat. The oldest of the group, Joe Philpot, an eternal optimist and patriot, secretly worried about the condition of his knees, wishes he could have a beer. Will Easton, a good-looking young man and recently a father, keeps his worries about making ends meet to himself. Bob Crass, the foreman, asks Bundy about the horses tipped in the local paper, The Daily Obscurer. Slyme – who believes God is a Conservative – tries to rile a wire-thin worker, Frank Owen, by saying the Obscurer's a Conservative paper so its racing tips can be trusted. He suspects that Owen is some kind of red.

The conversation flits from subject to subject, ill-informed but lively, ignorance blazing into certainty, like the talk at any working-class meal break – or middle-class dinner party – from 1905 to this day. Now Will Easton has the newspaper. Falteringly, he reads a news item about unemployment in the town rising while wages are being driven down. The social distress is putting pressure on overstretched charities (sound familiar?). An argument flares up about poverty: what causes it? Crass blames drink. Harlow blames overpopulation. Bundy thinks education is the cause. Crass agrees, education puts foolish ideas in people's heads and encourages laziness; they don't bother to get the skills needed for work. Old Joe Philpot says there's always been rich and poor in the world and always will be. Slyme believes poverty is caused by personal failings: "when it comes to poverty what a grown man must do is conquer hisself."

Frank Owen can contain himself no longer and intervenes. Overpopulation? Millions die of famine – does that make for less poverty ? And drink, laziness, lack of skills, personal failings, have nothing to do with it. The question is: what is the cause of the life-long poverty of the majority who aren't drunks and do work?

Crass, one of nature's NCOs and deeply suspicious of Owen, challenges him: if you're so clever what is the real cause of poverty?

I'll tell you the cause of poverty, says Owen. It's money. The workmen guffaw – is he mad?

"Prove it," says Crass.

And so begins Owen's performance of "The Great Money Trick", one of the greatest passages of comic political writing in English literature. It is in The Ragged Trousered Philanthropists by Robert Tressell.

Tressell was the pen name of an Irishman, Robert Noonan; he took it in honour of his trade, painting and decorating. Last year I adapted his masterpiece as a play which was performed at the Liverpool Everyman Theatre then at the Chichester theatre festival. The idea to do the adaptation came from its director, Christopher Morahan. He says of the novel: "It's the antidote to the double dip, what it's like to be working or not as the case may be, funny, true, angry and timeless. It changed my dad's life as it did mine."

"The Great Money Trick" never failed to work both for the angry, sharp and sympathetic audience at the Everyman and the more conservative, though equally alert, audience in Chichester's Minerva theatre.

It's all done with blocks of bread.

Owen takes the role of the entire capitalist class. Three of the workmen play the entire working class. Owen cuts slices of dinnertime bread. They represent raw materials. The workers are paid to change the raw materials into goods, which they do, cutting each slice into three blocks. Owen pays them each one block of bread: a third of the value of the goods they made. At the end of a week's work Mr Capitalist Class has two blocks, a worker has one. But every week they have to buy the necessities of life for which Owen charges . . . one block of bread. Hey presto: the workers end up with nothing. They do it again. His workmates laugh as Owen's blocks of bread – his profits – pile up, the rich getting richer the poor staying poor. Then without warning Owen closes down his factories. There is a glut. The market is depressed. The dinnertime scene erupts into a carnival of protest, then suddenly Mr Hunter, Rushton's General Manager, bursts in. Meekly they go back to work.

What Tressell has demonstrated so entertainingly is nothing less than Karl Marx's labour theory of value, a cornerstone of socialist thinking.

Robert Noonan was born in Dublin in 1870, the illegitimate son of Mary Noonan and a police inspector. Mary married another man for security but Robert hated him and left Ireland for South Africa. In Cape Town a marriage failed, bitterly. His ex-wife died in 1895 leaving him with a daughter, Kathleen, who was with him until his death. They moved to Johannesburg where he made his way as a skilled artisan, a scenic painter and sign writer. He also became known as a political activist: he was a member of the Johannesburg Trades and Labour Council, and he joined a local Sinn Fein organisation which supported the Boers in their struggle against the British. He may have fought with the Boers when war broke out, though much about his life at this time remains obscure. But it seems that in 1900 things became too hot for him and he and Kathleen left for England, settling in Hastings. The town became the model for Mugsborough in his novel.

He lay low for a few years, turning his back on his radical past and trying to establish a secure home with his daughter. But in 1906 he became politically active again and joined the Hastings branch of the Social Democratic Federation, a small leftwing party whose founding members included William Morris. A year later he rowed with an employer and fell ill with tuberculosis. Despite his skills he found it increasingly difficult to find work. He completed The Ragged Trousered Philanthropists in 1910. The handwritten 1,600-page manuscript was rejected by three publishers. Kathleen had to stop her father burning it. He left for Liverpool, determined to earn enough to book passages to Canada for them to start a new life. But he failed and died of lung disease in the Royal Liverpool Infirmary Workhouse on 3 February 1911. He was buried in a pauper's grave.

Then the life of the novel began. Kathleen succeeded in getting a greatly truncated version published, selling the rights for £25. It appeared almost immediately in Canada and the US, in the Soviet Union in 1920 and in Germany in 1925. Fuller versions in manuscript form circulated – George Orwell read one. It had a deep impact on the trade union and labour movement. It became known as "the Socialist Bible" and was even credited with winning the 1945 general election for the Labour party. The full version was finally published in 1955.

The novel's 750 pages teem with comic and tragic incidents. Tressell uses wildly varying styles. He describes life on the edge of the abyss of destitution, a place he knew all too well, with a tender naturalism. But he is never sentimental. Ruth Easton's husband Will sinks into alcoholism, they rent out a room to the religious Slyme, who seduces her. Finding herself pregnant she goes to drown herself in the canal. But Tressell knows chance and death go hand in hand. Ruth finds that where there was a gate to the canal towpath there is now an iron railing. Almost farcically, she can't find a way through. She gives up and goes to Nora Owen, Frank's wife, for help and survives.

Tressell relished writing set pieces sometimes of farce, sometimes of great eloquence. Vivid scenes among the bosses on the town council read like a berserk Dickens. In contrast there is "The Great Oration", a mighty 30-page speech given by the renegade son of a rich Manchester manufacturer (shades of Engels). In crystal-clear prose, it covers the history of capitalism from the middle ages to the end of the 19th century, then sweeps on to describe how a just socialist society could be achieved. There is a children's birthday party at which Bert White entertains children and parents with "the grand pandorama", a toy theatre he has made using newspaper and magazine cuttings that mix patriotic scenes of empire and royalty with pictures of appalling factory conditions and riots.

The workers are "philanthropists" because they give the value of their work away to their employers. Tressell sees them as stunted, their potential blocked, ignorant of their predicament. They are forever having to hurry and botch jobs to keep costs down, suppressing their natural creativity. From the firm's owner Rushton to his manager Hunter, the foreman Bob Crass, to the workers, the system brutalises and squeezes the humanity out of everyone. The Ragged Trousered Philanthropists is the working-class Vanity Fair.

In the 1900s the two paths socialism could take were already mapped: revolutionary and parliamentary. The party Tressell joined, the SDF, was revolutionary. We know that path led to the disaster of the Soviet Union. But the reformist path taken in Britain has led, after the successes of the 1945 Labour government, to the watering down and sluicing away of all socialist aspirations by New Labour. Does Tressell say anything to us? Can we compare our world to the Hastings of 1905?

In "The Great Oration", Tressell describes the creation of a new kind of state: the co-operative commonwealth. It is a communist vision, utopian, even quaint, but deeply moving. Writing a stage adaptation made me think, paradoxically, that everything is different but nothing has changed. We too are enmeshed in a feckless and dangerous capitalist system. Tressell's wonderful book convinced me that it's time to begin the struggle for the co-operative commonwealth all over again.